Billionaire Scott Bessent could face several hurdles as the nominated U.S. Treasury Secretary

On Friday, President-elect Donald Trump nominated billionaire investor and Key Square Capital Management founder CEO and founder Scott Bessent as the U.S. Treasury Secretary. The role would involve Bessent overlooking all financial monetary policies regulations, and initiating financial relations. 

So far, there has been much support for Scott Bessent’s possibility of becoming the next U.S. Treasury Secretary. Wall Street’s feedback has been positive, with several indices gaining after the nomination. The final decision still remains with the Senate, which would give Bessent support from the right and left. 

However, according to a recent report from a Washington correspondent, the nominated Treasury Secretary could face a few hurdles in the implementation of Trump’s policies. The report also outlined some negative feedback for his nomination by some right Trump supporters. 

One example was Tesla and SpaceX CEO and founder Elon Musk’s recent tweet calling Bessent a business-as-usual choice. Notably, the Tesla CEO suggested that business as usual was driving the country into bankruptcy. Musk also praised Bessent’s rival during the vying for the position, Howard Lutnick, as someone who could enact change compared to Besent.

Bessent promises to implement Trump’s policies

Bessent as Treasury Secretary reinforces market's perception of a "Trump put" – and Bessent lends substantial economic and market credibility to the incoming cabinet.🤝🏼

He has advised Trump to pursue a “3-3-3” policy:
– cutting the budget deficit to 3% of gross domestic product… pic.twitter.com/VUu6MrRB7t

— FS Insight (@fs_insight) November 25, 2024

Research firm FS Insight mentioned on November 25 that Scott Bessent becoming the U.S. Treasury Secretary would reinforce Trump’s put. Additionally, FS Insight noted that the billionaire is a trusted economic figure, contributing to the credibility of the incoming cabinet. 

Scott Bessent advised Trump to implement the 3-3-3 policy, which would involve cutting the budget deficit to 3% of the U.S. GDP, implementing deregulation to improve the GDP by 3%, and increasing oil production by 3 million barrels a day. According to Bessent, the 3-3-3 policy would fuel economic growth, improve the country’s energy production, create an environment to encourage investments, and more. 

Scott Bessent is set to implement Trump’s tariff policies, sharing his fondness for the incoming president’s plans. The investor expressed his opinion in a November 25 Fox News opinionated piece. Bessent highlighted the importance of proper implementation of the tariffs to influence revenue growth. 

According to the nominated Treasury Secretary, tariffs could also work for Trump’s foreign policy objectives, including encouraging U.S. exports, reducing illegal immigration and drug trafficking, reducing military aggression, and more. 

Bessent will further need to deliver tax cuts as per Trump’s policies. The investor mentioned in an interview that the cuts were a top priority. Trump promised a corporate tax cut from 21% to 15%.

The nominated Treasury Secretary believes in the Fed’s independence

Scott Bessent has been significantly vocal about the need for an independent Federal Reserve. However, his views could go against Trump’s plans to overlook some of the decisions made by the U.S. central bank. The left could further be against Bessent in case he supports some of his past views on the Fed including having a ‘shadow Fed chair.’

The nominated Treasury Secretary, while speaking to Barron’s in October, suggested that a Trump decision to name Fed chair Jerome Powell’s successor could discredit any decisions Powell makes. Jerome’s term as the Fed chair will end in 2026, and his term on the Fed Board of Governors will end in 2028. 

Senator Elizabeth Warren recently advised Scott Bessent not to interfere with the Fed’s decisions. In a statement on November 25, Senator Warren explained that while she does not support all of Powell’s decisions, she does not question his right to make them.

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